Which of the following is NOT a common settlement option for life insurance proceeds?

The correct choice indicates that "additional paid-up insurance" is not a common settlement option for life insurance proceeds. In the context of life insurance, common settlement options typically include choices that provide beneficiaries with immediate access to the death benefit or options for structured payouts, such as lump sum payments, interest income, or an income for a specific period.

Lump sum is the most straightforward option, allowing beneficiaries to receive the full death benefit in a single payment. Interest income provides a way for beneficiaries to receive earnings on the death benefit while it remains with the insurance company. Income for a specific period allows beneficiaries to receive regular payments over a set duration, providing a steady income stream.

In contrast, additional paid-up insurance is not a commonly recognized method for settling a life insurance claim. Instead, it refers to a feature of whole life insurance where the policyholder can use the cash value accumulated in the policy to purchase additional insurance without needing to provide further premium payments. This choice does not align with the immediate needs of beneficiaries who typically seek options that offer either liquid cash or structured payments from the policy's proceeds upon the insured's death.